How to cite this article:
Riyadi, A. & Kristanti, E. Y. (2021). Factors influencing value creation on brand trust in hotel business: Case study of 3-, 4- and 5-star hotels in Indonesia during the COVID-19 pandemic. Journal of Event, Tourism and Hospitality Studies, 1(1), 184-209.
https://doi.org/10.32890/jeth2021.1.9
FACTORS INFLUENCING VALUE CREATION ON BRAND TRUST IN HOTEL BUSINESS: CASE STUDY OF 3-, 4- AND 5-STAR HOTELS IN
INDONESIA DURING THE COVID-19 PANDEMIC
1Agus Riyadi & 2Eunike Yoanita Kristanti
1Hotel Department, Trisakti Institute of Tourism, Jakarta, Indonesia
2Trisakti Institute of Tourism, Jakarta, Indonesia
Corresponding author: agus.riyadi@stptrisakti.ac.id1
Received: 11/5/2021 Revised: 18/5/2021 Accepted: 2/6/2021 Published: 15/7/2021
ABSTRACT
This research investigates the society or guests’ perception of the value creation and brand trust, and aims to examine the effect of value creation on brand trust in 3-, 4-, and 5-star hotels in Indonesia during the COVID-19 pandemic. This research adopted the quantitative method and used probability sampling to determine the sample size. The data were collected using questionnaires via Google Forms and also distributed to respondents who had stayed in 3-, 4-, and 5 star hotels in Indonesia during the COVID-19 pandemic with a total respondents of 99 people.
Hypotheses were tested and the findings suggest that value creation has a significant impact on brand trust. The results suggested that hotel brands in Indonesia need to create values that are appreciated by the society as a whole and hotel guests. However, hotel brands in Indonesia still need to improve their creations of value to further boost brand trust for hotel brands in Indonesia in order to improve the hotel performance. The development of a business-oriented analytical framework that aids practitioners in assessing and approaching the opportunities posed by value creation on brand trust is further discussed in the study.The paper introduces an analytical and fresh perspective on value creation and brand trust particularly in a hotel industrial marketing context.
JOURNAL OF EVENT, TOURISM AND HOSPITALITY STUDIES
http://e-journal.uum.edu.my/index.php/jeth
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Keywords: Public Value Creation, Brand Trust, Hospitality Industry, COVID-19
INTRODUCTION
The world has been tremendously shaken up by the novel coronavirus causing COVID-19, subsequently named SARS-CoV-2, which was first reported by officials in Wuhan City, China, in December 2019. Then, the virus became a threat since the World Health Organization (WHO) declared this as a pandemic on March 11, 2020(Hao et al., 2020; WHO, 2020). There were 96.2 million cases with 2.06 million casualties recorded as of January 22, 2021; causing countries to halt activities and businesses. Indonesia is also not excluded from the impact of the COVID-19 pandemic, having an amount of 952 thousand cases with 27 thousand casualties. This had caused the President of Indonesia, Joko Widodo, to create a government regulation to apply Large Scale Social Restrictions (LSSR) on March 31, 2020(Purwanto et al., 2020).The Minister of Finance of Indonesia referred that LSSR amid the COVID-19 pandemic has deeply affected the country's economy (CNN, 2020). Indonesia's economy in the first semester of 2020 had plummeted 1.26%
compared to the first semester of 2019 (Wuryandani, 2020). Furthermore, LSSR has affected almost every economic sectors in Indonesia, with the tourism industry including aviation and travel, hotels, and culinary businesses in the frontline as the most affected industries as well as likely the last to recover after the economy is back to normal (Azhar, 2020). The Indonesian Hotels and Restaurants Association (PHRI) reported, a total of Rp 85.7 trillion loss was recorded with Rp 30 trillion from the hospitality industry (Wahyudi, 2020). Indonesia's hotel occupancy suffered a great loss that the occupancy dropped by 50% (BPS). From the hotel's low occupancy to 95% of the tourism industry employees furloughed without pay (Azhar, 2020), it could be seen how the hotel's performance in Indonesia is greatly affected during the pandemic.
According to research on crisis management in the hospitality industry, good approaches include increased regional marketing and infrastructure loss(Breier et al., 2021).This is where brand trust plays a role in the hotel's performance. It is said that brands and their customers could be considered business partners, where their respective perceptions of mutual trust influenced their exchanged relationships (Singh et al., 2012). In other words, trust could be defined as there is a
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confidence that integrity and reliability during interactions are present during the exchanged interactions of business partners (Delgado-Ballester & Munuera-Alemán, 2005; Morgan & Hunt, 1994b).Khodadad Hosseini & Behboudi (2017) proposed that, especially in intangible services, trust is required in transactions. Their precept connects to a statement saying that with incomplete and asymmetric information, the common key determinant of consumer-based trust in a brand is credibility. Consumers may rely on formed expectations on a brand products' quality and safety just from knowing the brand (Lassoued & Hobbs, 2015). This connects to Sodano (2002) who argues that: "Consumers who pay a premium price for high-quality products which have quality characteristics can check neither before nor after the purchase, need a certain amount of "blind"
trust in suppliers." The suppliers in the previous statement could be considered as brands. Portal et al. (2019) implied that a brand needs to have good intentions and sound abilities to build consumers' trust towards them. Napoli et al. (2014) referred that consumers tend to trust brands that perform as they have promised. When a consumer feels uncertain or insecure of a purchase decision, especially as what is happening in the year 2020 to the hospitality industry, they are more incline towards trustworthy brands.
In a recent study of the reaction of Hotel business firms to the COVID-19 crisis, Breier et al.(2021) described interim innovative business models as a possible solution to recover from the COVID-19 crisis. This could assist hoteliers in their recovery from the crisis. Although innovation creation is innovated through major improvements to the components and/or designs, new possibilities can be approached (Foss & Saebi, 2017). Creating value for the customers is the basis of business to business marketing, especially in today's market-places. In order to face increasing competition globally, especially in this pandemic, hotel firms need to continually search for means to differentiate themselves from competitors and gain the customers' trust. This view has directed the managerial attention to a broader and more in-depth understanding of how hotel firms create value for the customers (Eggert et al., 2018).Particularly when developing new products or services, value creation for customers is challenging for marketers (Smith & Colgate, 2007b). Especially during the COVID-19 pandemic, recognizing and understanding the different value dimensions that heterogeneous individuals in the populations of social issues seek, allow
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marketers to seek everyday value experiences to develop more effective and targeted social change programs (Butler et al., 2016 in Zainuddin et al., 2017).Earlier research by Storbacka et al.
(2016) revealed that the company's strategy must be able to provide value based on the needs and desires of its customers. A company's primary responsibility is to create value for its employees, customers, shareholders, and the quality of its management (Barnes, 2003; Duchessi, 2002).
Traveloka's new program is an excellent example of value creation. Amidst the early stages of the COVID-19 pandemic in Indonesia, Traveloka gave out surveys to its customers to find out the customers' needs at the moment. Customers mostly answer with time flexibility upon buying.
Traveloka sought to find out what the customers value the most in this moment of the pandemic.
In return, Traveloka creates Buy Now Stay Later for customers to buy vouchers to stay in Traveloka hotel partners in Indonesia. This voucher gives customers the flexibility to choose the best time to stay at their choice of hotel (Traveloka, 2020).Additionally, several hotels also offer new promotional creations such as Work From Hotels in addition to self-isolation packages during the pandemic (Ghani, 2020). Various promotional programs have been stepped up, but they have yet to yield results since the consumers remain fearful of contracting the COVID-19 virus (Chebli & Ben Said, 2020; Jian et al., 2020). As a result, some hotels with poor corporate strategies appear to be collapsing, with some hotel properties being sold by their owners. The Indonesian Hotel and Restaurant Association (PHRI) reported that 1,033 restaurant and hotel businesses in Indonesia are currently permanently closed due to the Covid-19 pandemic since the survey was conducted in September 2020 until now (Andri, 2021).
In the current economic downturn driven by COVID, it may become more difficult for hotel operators to do business, for example, to remain fully operational, while continuing to survive in the short term(Hepburn et al., 2020). Furthermore, Lindgreen et al. (2019) stated that “Businesses form and transform social conditions which leaders are highly instrumental not only in making markets but also in building societies. In modern times, such value creation for society has had an indispensable impact. A further, bigger step than just doing good is required to cross the division between what companies do and what society at large recognizes as truly valuable.” Overall, this article shows that creating value and brand trust by hotels during the COVID-19 pandemic was
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more difficult than dealing with other crises, but new approaches in the post-COVID era may provide lessons to be learned(Kaushal & Srivastava, 2020). The research question in this paper is to investigate how companies can create long-term value and brand trust. However, the studies are limited and sometimes confusing when it comes to the effect of value creation on brand trust in 3-, 4- and 5-star Hotels in Indonesia during the COVID-19 pandemic. In other words, during the COVID-19 pandemic which is affecting everyone, it is crucial to value more than just profits for the company, and the best way is to create value not just for the customers but also the society.
Understanding that this is a challenging time in every aspect, it is vital for hotels in Indonesia to create or provide the values needed by the society. The primary purpose of this study is to examine the effect of value creation on brand trust in 3-, 4- and 5-star hotels in Indonesia during the COVID-19 pandemic. This study will offer pertinent knowledge and some recommendations to practitioners and managers in this industry to improve performance. As the Hotel Manager knows the needs and wants of its customers, reciprocity will likely occur in the form of positive behavior from customers toward the company (Kusumadewi, 2019).Otherwise, hotel managers aiming to provide value creation and reliable experiences should adapt their strategies to ensure a full image of the customer and provide more meaningful communications that help create confidence during these unpredictable times of COVID-19. Hotel Managers can do so more effectively in the short term by using specific data for targeting and personalization while developing a long-term plan that addresses how identity underpins the entire consumer journey(Chan, 2020; Kim, 2020).
Literature Review
Value Creation
In order to deal with the COVID-19 crisis, values can be evaluated based on cultural, hedonic, social, status and economic factors (Grohs et al., 2020). According to Wenger et al. (2011), value is developed, when members of groups and/or networks are engaged in keeping up with their field of practice by learning together, exchanging knowledge, and helping each other with documents, tips, and lived experiences to help solve problems and improve professionally. To recover faster
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from the impact of COVID-19, Chesbrough, (2020) suggests an opening up of the global economy focusing on value creation. Dohrmann et al. (2015) suggested monetary value creation to create a proper business model approach. To remain in sync with what the customers need, the expectations of the citizens, and changes in society, top executives are pressured to rectify the purpose of value creation. It is then highly significant for them to build societies and not only make markets, understanding that business is influential towards social conditions (Lindgreen et al., 2019). Every business company is founded to preserve and increase public confidence in the business through more real engagement and involvement, and public value creation have a positive impact on the behavior of organizational leaders in managing organizations (Pasaribu, 2014).
Customers have a sense of ownership as a result of their participation in the value creation process, and they begin to suggest brands to others (Iglesias et al., 2011; Zainuddin et al., 2017a).
One of the strategies for successfully engaging with customers for better experience management is value creation. Prahalad & Ramaswamy (2004) stated that value creation, defined as the joint production of value by the company and the client stands out as a significant mechanism for competitive advantage in this customer-oriented marketing approach. Value creation creates positive influence on trust that customer builds with the brand (Shrivastava, 2016).Having evolved from a firm-oriented concept to a consumer-oriented one, modern-day value creation has the purpose of understanding what leads to consumer value creation and experience (Holbrook, 1999, 2006; Zainuddin et al., 2017a). Zainuddin et al., (2017b)also stated that “understanding the value creation process in social marketing services allows for the achievement of important outcomes such as satisfaction and intentions to engage with a service or an activity again in the future.” As noted earlier, Lindgreen et al. (2019) refers that it is also important to confront the complexity of value, while a company or brand needs to stay agile facing turbulent times.
Chesbrough et al. (2018) highlighted that value creation is a process that cannot be achieved without capturing a particular part of a value and recreating the captured value in a new creation since value creation is dynamic and ongoing.
Meynhardt (2009) said that “public value creation is situated in relationships between the
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individual and ‘society,’ founded in individuals, constituted by subjective evaluations against basic needs, activated by and realized in emotional-motivational states, and produced and reproduced in experience-intense practices.” Taking his statement into consideration, public value redefines the idea of value creation by including moral, political, utilitarian, and hedonistic aspects as components for public value creation. The reason is the public value is all about contributions that are associated with a company rightly or wrongly, whether they are good or not (Lindgreen et al., 2019). Moreover, hotel companies need to constantly invest in the new creations of new value, especially in the highly competitive hotel industry markets at the moment(Chesbrough et al., 2018). The customers always remain in the center as they take part in creating valuable experiences since the customers are the only ones who perceive the experienced value(Jensen & Prebensen, 2015). There is a necessity to create meaningful and specific values for each customer since they are the ones at the center experiencing firms’ created value.
Brand Trust
Gallo (2014)argued that acquiring a new customer would be five to 25 times more expensive than holding onto existing ones. That is one reason why creating, developing, and maintaining trusting relationships with customers is crucial. Trust is defined that each business partner, in this case, the brand and its customers (Singh et al., 2012), will act with integrity and reliability during business interactions (Morgan & Hunt, 1994b; Munuera-Aleman et al., 2003). Therefore, it is vital to make customers trust brands because brands that are viewed by them have a higher chance of success.
A firm can build brand trust by having good intentions and sound abilities (Portal et al., 2019).Trust is more enduring in nature, so it is safe to say that brand trust develops over time, and occurs in the context of a relationship through direct experiences (Chaudhuri & Holbrook, 2001;
Delgado-Ballester & Luis Munuera-Alemaan, 2001). This relates to a statement saying that
“successful relationships between brands and their customers are interactive, connective, and ongoing”(Vargo & Lusch, 2011). The two statements above support the statement that trust, due to the growing importance of relationship marketing, has become an essential construct in branding (Delgado-Ballester & Luis Munuera-Alemaan, 2001; Hess & Story, 2005; Lantieri &
Chiagouris, 2009).
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Brand trust, is essential especially in intangible services (Khodadad Hosseini & Behboudi, 2017).
Sodano (2002) argues that “consumers who pay a premium price for high-quality products which have quality characteristics can check neither before nor after the purchase, and need a certain amount of “blind” trust in suppliers.” In other words, the perception of a brand’s fairness and integrity are dependent variables for brand trust (Portal et al., 2019). It could also mean that when a consumer trusts a particular brand, even though it involves risk of disappointment and uncertainty, the trust towards the particular brand could evolve into confidence, which involves knowledge and faith (Lassoued & Hobbs, 2015). Other researchers concluded that brand trust is seen as a control mechanism that promotes exchange relationships characterized by volatility, risk, and vulnerability by reducing uncertainty(Hong & Cho, 2011; Li et al., 2015; Morgan &
Hunt, 1994a).
Hyphotesis
Lindgreen et al. (2019) proposed that it is also important to confront the complexity of value, while a company or brand needs to stay agile facing turbulent times. The larger task is to manage public value, since it stems from the plurality of perspectives, to help a company or a brand address the gap of business life and public perception of what the economy is good for. Also, Rahmani et al., (2017) concluded that customers’ values need to be realized. A few research have found that value creation has a significant positive impact on building customers’ brand trust (Carnevale et al., 2018; Laroche et al., 2012; Mosavi & Kenarehfard, 2013; Rahmani et al., 2017).
Companies may set consumer expectations by communicating the value commitments of their corporate brands in a branding framework(Ozdemir et al., 2020).While brand trust is significant for customers to trust risky products developed by a brand, it is also significant to create the right values in order to gain customers’ trust. Chesbrough et al., (2018a) revealed that “in the highly competitive hotel industry markets, companies need to continually invest in the creation of new value.”
Previous studies had examined the variables of value creation and brand trust where value creation was studied as both the dependent and independent variable. However, the study of the
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effect of value creation on brand trust in the service industry, especially in the hospitality industry is limited. COVID-19 pandemic has been a very challenging time for every single people in the whole including hotel brands. In this study, it can be seen that brand trust is vital and can be built by creating the right value for the society in large. Sanz-Blas et al., (2019) stated that his findings support the hypothesis that value creation practices have an effect on consumer-brand bonding.Managers, according to Carnevale et al., (2018), should take more constructive measures to create and maintain value expectations. It is suggested that consumers should use brand trust as a powerful cue to minimize perceived risk and thereby mitigate its negative impact on perceived value based on these propositions. Based on these, the following hypotheses are formulated:
H0: Value creation does not affect brand trust.
H1: Value creation affects brand trust.
METHODOLOGY
A quantitative-descriptive approach was utilized in this current study. The questionnaires were distributed through Google Forms as well as physical paper questionnaires. The questionnaires have a total of 17 items that fit the measurements of both the value creation and the brand trust variables. The first section of the questionnaire consists of demographic factors including a question as to whether the respondents have had experience staying in 3-, 4-, and 5-star hotels in Indonesia during the COVID-19 pandemic. Likert scale was used in the questionnaire with a scale ranging from 1 (Strongly Disagree) to 4 (Strongly Agree).For value creation, it is limited to finding out the values that the public sought while buying products or services from hotel brands in Indonesia during the COVID-19 pandemic through five measurements of value creation: “Is it useful?”; “Is it profitable?”; “Is it decent?”; “Is it politically acceptable?”; and “Is it a positive experience?” (Lindgreen et al., 2019). Meanwhile, brand trust is limited to using three brand trust indicators: "The brand keeps its promises," "The brand can be trusted," and "The brand is trustworthy" (Dagger et al., 2009; Iglesias et al., 2018; Mende & Bolton, 2011). Brand trust can be trusted is built based on sincere manner as well, not just providing the best quality of products and services. Rather than brands that only focus on giving the best quality, customers prefer to trust brands that show honesty and sincerity (Portal et al., 2019). Whereas, customers are seeking
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out trustworthy brands when they are confused or unsure about something, and confidence develops as a result of perceived danger.
Customers evaluate the trustworthiness of a brand based on cognitive and emotional brand attributes (Portal et al., 2019). It is well understood that ethical corporate conduct aids in the development of consumer interest in a company (Iglesias et al., 2018). This will occur if the whole organization is ethical; they would appear to be more trustworthy. This research used a probability sampling technique with the restricted or complex sampling data distribution technique. Using the Fraenkel & Wallen (1993) sample size theory, a total of 100 responses were deemed as sufficient as this is a descriptive-correlational research. The questionnaires were distributed to people in Jakarta who had stayed in 3-, 4- and 5-star hotels in Indonesia during the COVID-19 pandemic. Statistical Package for the Social Sciences (SPSS) version24.0 was used as the data analysis software in this research which includes: descriptive statistics, validity and reliability tests, coefficient determination, exploratory factor analysis and regression.
RESULTS
Respondents’ Background
There were a total of 100 respondents who participated in the study but only 99 questionnaires are valid to be used and analyzed since one of the respondents did not fully complete answering the whole questionnaire. It has to be noted that the researchers found it hard to find respondents who fit the research criteria since it was quite rare to find people who had stayed in hotels during the pandemic in the researchers’ circle and the limited time of two months of questionnaire distribution. Most of the respondents are women with 61%; mostly are older than 50 years old with 32% or in between the age of 21-30 years old with 27%; bachelor or higher degree graduate with 62%; working as private officials with 42%; staying for 2 or 3 days with 29% each or more than 3 days with 23%, and most of the respondents chose to stay between Jakarta or West Java for their hotel stay during the COVID-19 pandemic with 26.26% and 36.36% respectively.
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Mean Values and Discussion on Value Creation and Brand Trust
Table 1 depicts the findings of value creation and brand trust. Value creation receives an overall score value of 3.42 or Very Good. Based on the table above, the political-social dimension with whether or not the creation is politically acceptable as the indicator is the highest rated score out of all the Value Creation dimensions. People are valuing hotel brands that are politically and socially responsible, where the health and safety of the guests and employees are prioritized. It also proves that right now, it is important to put focus on society as a whole, where value is considered in terms of both benefits and costs generated by a service, a policy, or a program (Bracci et al., 2012).This concludes that hotel brands in Indonesia have made great creations to adapt to the COVID-19 pandemic. It is suggested for hotel brands to keep creating values to adapt to different kinds of situations. Hotel Manager innovation may also play a role even though solutions to complex problems remain unknown and can come from various ways, particularly when the solution gives advantages the users themselves(Von Hippel, 2006, 2016).
From the results, it could be seen that creation that focuses on profit has the lowest rate. It is suggested for hotel brands to internally switch cost in order to create a more beneficial promotion for the guests. Switching cost could be done by allocating the budget from one department to another department. For example, during the pandemic, guests do not come to the hotel restaurants as often. One solution that could be made is cutting the food cost for the restaurant and allocate it to other departments in need, for example the housekeeping department where it needs more hand sanitizer that can be costly. The brand trust variable has an overall score of 3.43, which means “strongly agree”. The findings show that a brand's trustworthiness is insufficient(Hong & Cho, 2011). However, according to Portal et al. (2019), a firm, or in this case, a hotel brand, can build brand trust by having both good intentions and sound abilities. The guests and society must demonstrate that the brand is trustworthy and has good intentions. This suggests that, despite the COVID-19 pandemic, people in Jakarta trust hotel brands in Indonesia.
Even though it has received positive feedback, it is recommended that it continues in the future, even after the pandemic has passed. During the pandemic, it is recommended that hotel brands maintain their ability to do service branding, which is a marketing campaign that assures the
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Table 1
Mean Values Analysis
Dimension Items Mean
Score
Mean/
Dimension
Variable Mean Is it useful? During the COVID-19 pandemic, I could
experience some leisure time while staying in my favorite hotel.
3.47 3.41 Value
Creation 3.42 While staying at the hotel during the
COVID-19 pandemic, I feel relaxed and safe being served by the hotel staff.
3.34
Is it profitable?
During the COVID-19 pandemic, there are a few interesting promotion packages to stay at my favourite hotel (Pay Now, Stay Later, etc).
3.32 3.32
Is it decent? During the COVID-19 pandemic, my hotel of choice made service innovations, such as using a QR code to check in.
3.24 3.43
Once guests arrived, my hotel of choice implemented a new security check protocol, such as checking the guests' body temperature to ensure their safety and health during the COVID-19 pandemic.
3.62
Is it politically acceptable?
My hotel of choice complies with the government's health guidelines.
3.71 3.58
My favourite hotel has either national or international health and safety
certification.
3.45
Is it a positive experience?
During the COVID-19 pandemic, the promotions or service packages in my hotel of choice made me extremely happy.
3.40 3.40
The brand keeps its promises
During the pandemic, the staff at my hotel of choice has the professional ability to follow the health protocol.
3.43 3.54 Brand Trust
3.43
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Dimension Items Mean
Score
Mean/
Dimension
Variable Mean I am confident in the ability of my
hotel of choice to adhere to the government's health protocol.
3.59
The brand can be trusted
I am confident that my choice of hotel will ensure the safety of its guests while they are staying during the pandemic.
3.59 3.54
During the pandemic, I chose hotels based on the assurance of service products.
3.54
Despite the promotions, my hotel of choice serves me optimally during the pandemic.
3.59
The brand is
trustworthy
Because of the positive reviews during the pandemic, I'm certain that I'll be able to remain at my preferred hotel.
3.49 3.49
Validity Test
A validity test is used to test every single construct of this research, which consists of 17 questions that have to be answered by the respondents. This research uses convergent validity as its validity test procedure which is correlating the component score with the construct score where then it would result in a loading factor with a minimum of 0.5 or 0.6 (Chin, 1998; Ghozali, 2018;
Hulland, 1999).The independent variable (X),value Creation, has 10 items. After the validity test was conducted, three items were deemed invalid because the test result did not reach 0.5. On the other hand, the dependent variable, which is brand trust, has 7 items. After the validity test had been conducted, one item was deemed invalid because the test result did not reach 0.5.In order to determine the level of reliability of the research variables, Cronbach’s alpha and composite reliability were used. Variables are deemed reliable if Cronbach’s alpha is greater than 0.6 and the composite reliability is more significant than 0.7(Malhotra, 1996).Based on Table 2, it could be concluded that the Cronbach’s alpha is reliable with value creation obtained a value of 0.869 and brand trust obtained the value of 0.837.
197 Table 2
Cronbach’s Alpha Value
Outer Loading Cronbach
's Alpha rho_A Composite Reliability
Average Variance Extracted (AVE)
Constructs Value
Creation
Brand Trust During the COVID-19
pandemic, I could experience some leisure time while staying in my favorite hotel
0.667 0.869 0.890 0.840 0.549
While staying at the hotel during the COVID-19 pandemic, I feel relaxed and safe being served by the hotel staff.
0.639
During the COVID-19 pandemic, there are a few interesting promotion packages to stay at my favourite hotel (Pay Now, Stay Later, etc).
0.562
During the COVID-19 pandemic, my hotel of choice made service innovations, such as using a QR code to check in.
0.564
Once guests arrived, my hotel of choice implemented a new security check protocol, such as checking the guests' body temperature to ensure their safety and health during the COVID-19 pandemic.
0.542
My hotel of choice complies with the government's health guidelines.
0.639
My favourite hotel has 0.664
198 Exploratory Factor Analysis
This analysis was used to assess whether the items in the five functional areas identified earlier are grouped into logically consistent factors. This was done using Principal Component Analysis with Varimax rotation and Kaiser Normalizations on the 17 four scale items (10 items of value creation and seven items of brand trust) used in the instrument assessing value creation and brand trust.Table 3 shows that the KMO sampling adequancy index is 0.774 which is greater than 0.50.
KMO values that are between 0.5 and 1.0 can be categorized as high KMO values (Hair et either national or
international health and safety
certification.
During the pandemic, the staff at my hotel of choice has the professional ability to follow the health protocol.
0.826 0.837 0.885 0.881 0.535
I am confident in the ability of my hotel of a choice to adhere to the government's health protocol.
0.824
I am confident that my hotel of choice will ensure the safety of its guests while they are staying during the pandemic.
0.823
During the pandemic, I chose hotels based on the assurance of service products.
0.803
Despite the
promotions, my hotel of choice serves me optimally during the pandemic.
0.842
Because of the positive reviews during the pandemic, I'm certain that I'll be able to remain at my preferred hotel.
0.543
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al.,2006). Hence, the factor analysis is considered approriate for the given data set. Also, Bartlett’s test shows an approximate chi-square of 373.244, with an observed significance of 0.000 (Βartlett’s sign<0.005) and thus indicating that the overall intercorrelations assumptions are met and have a strong relationship among the variables. As a result, the data set was considered appropriate for conducting EFA.
Table 3
T-Values and P-Values Results
Dimension Anti -image Matrices
Communalities Extraction Value Creation Is it useful? 0.795ª 0.646
Is it profitable? 0.730ª 0.698
Is it decent? 0.784ª 0,515
Is it politically acceptable?
0.734ª 0.720
Is it a positive experience?
0.787ª 0.657
Brand Trust The brand keeps its promises
0.742ª 0.804
The brand can be trusted
0.815ª 0.769
The brand is trustworthy
0.943ª 0.663
KMO and Bartlett's Test Kaiser-Meyer-Olkin Measure of Sampling
Adequacy
.774
Bartlett's Test of Sphericity
Approx. Chi-Square 373.244
df 28
Sig. .000
The finding reported in Table 4, revealed that the travel motivation recorded a value of β=0.730, p<.000 with R²= .533. From the T-Statistical data, it is shown that the T-Statistics value is 10.514, which is higher than 1.96. The result revealed that value creation explains 53.3% of the variance in brand trust. Thus, the result does support the hypothesis whereby value creation is positively significant with brand trust. This finding is consistent with the result from a study by Verhagen et al. (2006) which concluded that intermediary trust was a strong determinant of seller’s trust. This result is also in line with previous findings (Laroche et al., 2012; Mosavi & Kenarehfard, 2013;
Rahmani et al., 2017).In contrast, the extent to which consumers were confident in the brand’s
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ability and competencies did not impact the relationship with value creation (Carnevale et al., 2018).
Table 4
T-Values and P-Values Results
R² T Statistics β P Values Value Creation -> Brand Trust 0.533 10.514 0.730 0,000
CONCLUSION
The results contribute to the service marketing theory by providing an empirically based insight into the dimensional structure of value creation and brand trust in the hotel industry in Indonesia during COVID-19.This article offers numerous contributions by discussing the relationship between perceived value and brand trust. First, this current study adds to the growing body of knowledge related to value creation research in consumer behavior changes during pandemics (Chebli & Ben Said, 2020; Kohli et al., 2020; Mansor & KaderAli, 2017). Several researchers had looked at risk recovery measures (e.g., providing quality assurance following Health guidelines, improving brand recognition, or product knowledge (Morgan-Thomas & Veloutsou, 2013; Nepomuceno et al., 2014; Yeung et al., 2010). However, to date, no researches have looked into the impact of perceived risk on perceived value, such as consumer brand trust (Pavlou
& Gefen, 2004). Second, as a result, it has been demonstrated that the three trust beliefs play distinct roles in the perceived value creation relationship, providing empirical support for the idea that trust should be considered separately (McKnight et al., 2002). As a result, hotel brands in Indonesia have come up with the innovative capacity to deal with the COVID-19 pandemic. The present study identifies that the hotels create new ideas in their promotion, where the guests still believe and trust the existing service provider. Therefore, they suggested that hotel brands continue to develop values to adapt to a variety of situations. The creation that focuses on profit has the lowest rate. Since the profit dimension of value creation had the lowest mean value, the researchers recommended that hotel brands switch costs internally to create a more beneficial
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promotion for their guests. Allocating funds from one department to another could be used to switching costs For example, guests do not frequently visit hotel restaurants during the pandemic, therefore, the hotel management may reduce the restaurant's food costs and redirect the funds to a department in need, such as housekeeping, which requires more expensive hand sanitizers.
During the pandemic, it is recommended that hotel brands maintain their ability to do service branding, which is a marketing campaign that assures the health and safety of guests and employees. To maintain brand trust, hotel operators can do several things, such as maintaining cash flow while providing psychological prices to guests, always providing self-expression and social meaning in every product and service, providing experience (Experiential), and maintaining the right feelings and emotions for customers during a pandemic, and fiddling with the right feelings and emotions for customers during a pandemic (Smith & Colgate, 2007a). One limitation of this study is the relatively small sample size, which precludes the analysis of SEM structural models with more than two multi-group analyzes. In addition, this study is based on data collected from the perceptions of guests from Jakarta regarding hotel selection assessments during the COVID-19 period. It did not attract responses from other consumers outside Jakarta who also had experience choosing hotel criteria. This provides an opportunity for future research with a larger sample drawn from various sector segments both from Indonesia and globally. In addition, it is suggested that future research to include other variables to reach a better coefficient determinant.
Health and safety, and organizational creativity could be added as other independent variables in future research. In this challenging time, finding out how hotel brands could improve association’s trust towards hotels in Indonesia is important. Finding out different means to build that trust is suggested to boost hotel brand performance in Indonesia.
CONFLICT OF INTEREST The authors declare no conflict of interest.
ACKNOWLEDGEMENT
This research received no specific grant from any funding agency in the public, commercial, or
202 not-for profit sectors.
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